Treasury's Listing Procedures are Unconstitutional, 9th Circuit Rules in Al-Haramain v. Treasury | Charity & Security Network record is not overwhelming the classified record coupled with the extremely deferential review it gives in cases involving national security lead it conclude that substantial evidence supported OFAC s conclusions Because the court did not discuss the classified evidence further it is not possible to draw any conclusions as to the kinds of fact patterns that lead to AHIF OR s designation 3 The balancing test between national security and individual property rights Using a test established by the Supreme Court in Matthews v Eldridge 424 U S 319 1976 for cases involving national security and due process rights the court said it would weigh the following criteria AHIF OR s property interest The risk of government error from the procedures used offset by any safeguards put in place and The government s interest in keeping current procedures including any additional burden that may be caused by new requirements The court noted AHIF OR s strong property interest saying that For domestic organizations such as AHIF Oregon a designation means that it conducts no business at all The designation is indefinite Remedies take considerable time as evidenced by OFAC s long administrative delay in this case designation indefinitely renders a domestic organization financially defunct p 20 The court went on to say that the Constitution certainly does not require that the government take actions that would endanger national security But the Constitution does require that the government take reasonable measures to ensure basic fairness to the private party and that the government follow procedures reasonably designed to protect against erroneous deprivation of the private party s interests p 21 The court applied this test to the remaining issues in the case 4 Could OFAC Treasury base its decision on classified information Although the court rejected AHIF OR s claim that a designation cannot be based on classified information it agreed that even if OFAC may use classified information it must undertake some reasonable measure to mitigate the potential unfairness to AHIF Oregon p 25 The court approved of AHIF OR s suggestion that OFAC could provide an unclassified summary or have its attorney view the evidence after getting a security clearance The court noted that Without disclosure of the classified information the designated entity cannot possibly know how to respond to OFAC s concerns Without knowledge of a charge even simple factual errors may go uncorrected despite potentially easy ready and persuasive explanations Indeed the benefits from such disclosure could flow not only to the designated entity which may be able to clear up errors but also to OFAC which may benefit from the resulting information provided by the designated entity p 25 The court went on to note that OFAC did not defend its failure to use either of these solutions to the problem of classified evidence arguing instead that they would be too burdensome and overwhelm the agency The court called these concerns abstract finding that they have little practical reality p 27 It noted that OFAC managed

Publication of Unindicted Co-conspirator List in Holy Land Case Violated Due Process Rights, Court Rules | Charity & Security Network Court opinion unsealed on Nov 11 2010 The Fifth Circuit s opinion states that The Government does not contest the holding that NAIT s Fifth Amendment rights were violated or that it should have filed the attachment under seal p 2 The Fifth Circuit also cited the public s right to access judicial decisions The pleadings in the case remain under seal Once unsealed the District Court opinion was revealed to be an unequivocal statement that CAIR ISNA and NAIT s due process rights were violated It noted that the list is unaccompanied by any facts providing a context for evaluating the basis for the United States Attorney s opinion Neither CAIR nor the other unindicted co conspirators have been charged with a crime and they have no judicial forum in which to defend against the accusations p 10 The District court noted that The Government has not argued or established any legitimate government interest that warrants publicly indentifying CAIR and 245 other individuals and entities as unindicted co conspirators It went on to say Evidence presented in a public trial is inherently different from the Government publishing a list of persons alleged to be co conspirators The public may make its own judgment from evidence presented at trial The evidence may be examined and conclusions can be drawn as to whether the evidence establishes what the government claims it does But a published list from the Government naming individuals and entities as co conspirators without any supporting evidence is not subject to such scrutiny Therefore the Court finds it appropriate to seal the entire list p 19 A Legal Maneuver Although the District Court ruled that due process rights had been violated it rejected the groups request to have their names removed from the list saying the Government produced ample evidence to establish the associations of CAIR ISNA and NAIT with HLF and other groups including Hamas It acknowledged that the evidence produced by the Government largely predates the date HLF was listed as a terrorist organization but was sufficient to show association p 15 It went to explain the details of the alleged associations concluding that maintaining the names of the entities on the List is appropriate in light of the evidence proffered by the Government p 15 NAIT called the District Court s analysis of the evidence erroneous and irrelevant On appeal the Fifth Circuit said that the District Court did not abuse its discretion by denying NAIT s request to remove them from the list but it criticized the evidentiary summary Although the trial included evidence tending to support some past ties between NAIT and the HLF p 8 the court noted that t he district court s findings do not amount to a ruling that NAIT took part in a criminal conspiracy to support Hamas In fact the Government has gone so far as to argue that it never in the course of this litigation labeled NAIT a criminal conspirator The Government argues that it

Resources | Charity & Security Network allowing KindHearts to pay its debts and distribute the remaining funds among a list of approved charities before it dissolves At that point Treasury will remove KindHearts from its terrorist list and pay its attorneys fees This timeline details the issues and procedural history of the case which illustrates the problems created by using post 9 11 emergency measures for long term regulation of charities in the national security context Read more about KindHearts Case Timeline Kindhearts v Treasury Successful Challenge to the Constitutionality of Treasury Shutting Down a Charity Date November 24 2009 The Aug 18 2009 federal court ruling in KindHearts v Treasury is a positive step forward in the ongoing efforts of U S charities to make national security laws fair and ensure they protect vulnerable people that depend on charities for vital aid The 100 page order found that the Department of Treasury s Treasury seizure of KindHearts assets without notice or means of appeal is a violation of the Fourth and Fifth Amendments Read more about Kindhearts v Treasury Successful Challenge to the Constitutionality of Treasury Shutting Down a Charity KindHearts Settlement Ends Litigation Date September 16 2009 On May 1 2012 lawyers for KindHearts for Charitable Humanitarian Development the Ohio based charity shut down pending investigation by the Treasury Department in February 2006 announced a settlement agreement with Treasury ending the litigation on terms favorable to the charity In 2009 the federal district court for the Northern District of Ohio ruled that the process Treasury used to shut the charity down while investigating alleged ties to terrorism violated the constitution and ordered further proceedings on what remedy Treasury should provide Read more about KindHearts Settlement Ends Litigation Exhibits and Transcripts from the Second HLF Trial Date April 9 2009 The attorneys for the Holy

Analysis - U.S. National Terrorist Financing Risk Assessment 2015 Sets Stage for Review of Rules Impacting Nonprofit Organizations | Charity & Security Network While noting a rise in banks Suspicious Activity Reports SARS that include charitable organizations there is no information on what if any actual abuse may have been revealed It is not possible to draw any conclusions from this information since there is no data on the trend in total SARS filed during the same period It may be that SARS filing has increased substantially and the increase in reports on charities is proportionate to an overall rise More data is needed for this information to be useful in assessing risk Sham Organizations and Fraud Not Legitimate NPOs One of the most important and useful points regarding NPOs states that While some terrorist supporters create sham charities as a cover to raise and move funds other terrorist groups and their supporters use charities to provide funds or otherwise dispense critical social or humanitarian services to vulnerable populations in an effort to radicalize communities and build local support Charities established and controlled by terrorist groups and persons assisting their causes can help fund the operation of schools religious institutions and hospitals that may create fertile recruitment groups or generate dependency among vulnerable populations for these essential services p 38 This taken together with the examples and other statements in the assessment establish that the primary risk to the charitable sector is fraud either through sham organizations or social wings of terrorist groups that abuse their programs for recruitment and propaganda purposes Charity related prosecutions and examples of U S charities that have been listed as terrorist supporters support this conclusion These cases demonstrate that there have been few instances of terrorist financing abuse of legitimate American charities Where abuse has occurred most of Treasury s information points to social wings of terrorist groups as the problem rather than legitimate charities recognized by the U S government This has implications for the review of U S terrorist financing restrictions on NPOs which are one size fits all rather than risk based Risk Based Approach or One Size Fits All Restrictions Treasury says it takes a risk based approach to protect the U S charitable sector from terrorist abuse p 35 However the broad restrictions placed on U S NPOs are not based on risk Instead they impose blanket prohibitions on all NPOs with inadequate exemptions and licensing procedures The Charity Security Network and Council on Foundations detailed these problems in a July 2015 memorandum to FATF Outreach Not Engagement In describing its approach to risk mitigation Treasury says its efforts include enforcement action increased IRS reporting on international activities and sustained outreach to the charitable sector and donor communities to raise awareness of the vulnerability and provide guidance on risk mitigation best practices p 38 While Treasury makes presentations at events with NPOs present and conducts quarterly informational meetings with NPOs that focus on international work it has not engaged in the two way dialog between governments and NPOs that is recommended in FATF s Best Practices Paper on Combatting the Abuse of

Summary and Analysis: President Obama’s September 2014 Civil Society Memorandum and Initiatives | Charity & Security Network Opposing Undue Restrictions on Civil Society and Fundamental Freedoms agencies shall oppose undue restrictions by foreign governments support reform efforts including through international bodies Facilitate Exchanges Between Government and Civil Society including assistance in drafting laws that respect civil society rights Commentary Nonprofits concerned about the impact of counterterrorism restrictions on their work can draw encouragement from these statements which are consistent with principles the Charity Security Network has articulated over the past five years However for the U S to effectively take global leadership on the issue of strengthening civil society it must first address its own restrictions that are inconsistent with the fundamental rights of expression peaceful assembly and association as well as international humanitarian law particularly in the area of national security law U S civil society has spelled out a variety of ways this can be achieved from helping to draft pending legislation to recommending regulatory changes On Sept 15 the Charity Security Network and 11 civil society groups filed comments with the UN Human Right Commission as part of its periodic review of the U S human rights record The comments lay out examples of how current laws and policies infringe on fundamental civil society rights and recommends that the administration engage in dialog about how to align security and human rights concerns Publication of the Presidential Memorandum one week later indicates that both the government and civil society share common goals and agree that the work of a strong independent civil society is necessary to address causes of violent extremism This should make dialog that leads to workable solutions possible The comments to the UN make the case for change Given the state of the world and the increasing pressures on civil society rights around the world there is not time to lose Opportunities for U S civil society and U S government engagement Specific items in the Presidential Memorandum that the U S nonprofit can follow up on include Agencies working on programs to counter violent extremism should be interested in talking with U S civil society about how independent nonprofit programs contribute to this goal and how a more enabling legal environment can increase effectiveness Regulators should discuss how to make their counterterrorism rules and policies impacting nonprofits meet the standard of being proportionate and targeted The required review of agency rules and policies is an opportunity to concretely address issues such as the Treasury Dept s licensing process the State Dept and USAID vetting requirements for grant applicants and redress procedures for groups put on Treasury s terrorist list Agencies responsible for human rights issues should discuss the ways U S laws infringe on protected rights of association peaceful assembly and expression and explore ways to re align them with human rights standards As a whole the administration should be interested in addressing these issues in order to fulfill its stated ambition of being a global leader in this area Fact Sheet U S Support for Civil Society The introduction to

Vetting in Afghanistan: Issues with the Defense Department, State and USAID | Charity & Security Network grantees State welcomed further dialogue to improve their existing measures but expressed concern with proposals that would indiscriminately expand the DOD contracting provisions to the Department of State 9 USAID likewise expressed a belief that their agency s efforts are not hindered by a lack of Section 841 authority but stated that they would welcome an independent grant of authority to terminate contracts for default to ensure that no U S funds go to prohibited parties USAID also expressed concern that any new procedures and responsibilities could disrupt the effective programs currently in place and would indiscriminately expand DOD contracting provisions to the agency USAID emphasized that USAID and DOD have different purposes and modalities for contracting resulting in the need for different vetting processes In addition as discussed below USAID recently adjusted its vetting procedure to incorporate a lower vetting threshold expanded its definition of prohibited parties and increased responsibility for prime awardees to verify the information provided regarding key individuals involved in each proposed sub award III WHAT ARE THE CURRENT PROGRAMS EMPLOYED BY STATE AND USAID While State and USAID are not subject to Section 841 both currently employ grantee and contractor vetting processes to prevent the distribution of U S funds to those who threaten U S security and foreign policy interests Vetting is a term used by the counterterrorism community to describe the process of screening the names of individuals and organizations against various lists of terrorists and their supporters The purpose of the vetting process is to practice due diligence to ensure that U S Government funds are not inadvertently awarded to terrorists or terrorists sympathizers 10 State vets all non U S companies competing for U S funded grants and contracts through the Office of Risk Analysis and Management Information provided by the grantee is compared to various databases to determine whether derogatory information exists that links the company or its key officials to enemy groups This information is forwarded to the assistant secretary of the office funding the activity who makes the final decision regarding whether the grantee and personnel are eligible for a grant or contract USAID similarly vets all non U S prime contractors and subcontractors in the competitive range to receive grants valued at over 25 000 USAID produced an updated Mission Order 201 05 on July 8 2013 immediately preceding the recommendations of SIGAR to expand the DOD Section 841 procedure and authority to State and USAID This new Mission Order lowers the previous vetting threshold from 150 000 to 25 000 and makes this threshold amount cumulative over all awards granted to a particular entity Mission Order also changes the definition of Prohibited Party from An individual or entity for which there are reasonable grounds to believe that such individual or entity is or was engaged in criminal terrorist or intelligence activities that are inconsistent with the interests of the US national security or the integrity of the USAID programs Mission Order 201 04 11 to An individual or entity that USAID knows or has reasonable grounds to suspect i Supports or has supported terrorist activities ii Is or has been engaged in terrorist activities iii Poses a significant risk of committing terrorist activities or iv Is or has been engaged in other activities which are contrary to the national security or foreign policy interests of the United States 12 This much expanded definition of prohibited parties allows the USAID Office of Security wider latitude in determining whether a party qualifies as a prohibited party and is therefore ineligible to receive a USAID grant or contract While USAID automatically performs vetting on all non U S recipients of USAID grants in excess of 25 000 Mission Order 201 05 makes it clear that even if vetting would not otherwise be required under these rules vetting will be conducted whenever USAID has reason to believe that the Awardee or Sub awardee could be a Prohibited Party 13 Whenever an entity is vetted each of its key individuals who are not U S citizens or permanent legal residents must also be vetted 14 The Mission Order makes clear that vetting is required for key individuals but is not required for the ultimate beneficiaries of the cash or in kind assistance such as food water medical care micro enterprise loans and shelter 15 Entities applying directly to USAID for the award are required to submit a detailed information package for each key individual including copies of government issued photo identification a copy of each individual s passport and tazkera 16 and information regarding the individual s tribal affiliation father and grandfather s names place and date of birth occupation residence and pseudonyms 17 These prime awardees are also responsible to take reasonable steps to verify the required information contained in the information forms and submitting the information to the Vetting Support Unit VSU 18 USAID s Vetting Support Unit then reviews the information package from the grantee or contractor for completeness and accuracy If there are no problems in the information package the USAID mission forwards the package to the agency s Office of Security in Washington D C for additional investigation The security office will them submit a recommendation of eligibility for the contract if the office does not identify any derogatory information regarding the person or entity The USAID Senior Deputy Mission Director makes the final determination as to whether to declare a contractor eligible for a contract IV PROPOSED LEGISLATION INCORPORATES SOME SIGAR RECOMMENDATIONS BUT NOT EXPANSION OF SEC 841 TO STATE AND USAID In proposed legislation the House and Senate each incorporated some SIGAR findings and recommendations into their drafts of the National Defense Authorization Act NDAA for the fiscal year FY 2014 The proposed bill would expand Section 841 authority within the DOD However neither the House nor the Senate expanded the legislation to grant State or USAID Section 841 authority or require compliance with a Section 841 determination The House which passed its version of FY 2014 NDAA on June 14 2013 expanded Section 841 to apply not only to the United States Central Command in Afghanistan but also to the U S European Command the U S Southern Command and the U S Pacific Command excluding only U S Northern and Africa Commands The House bill also repeals the sunset provision of the NDAA 2012 which is currently set to expire December 31 2014 19 The Senate Armed Services Committee which reported its version of the FY 2014 NDAA on June 20 2013 likewise proposed an expansion of Section 841 The Senate Committee recommends extending the provision to all combatant commanders 20 These combatant commanders would in consultation with the Under Secretary of Defense for Policy the Under Secretary of Defense for Acquisition Technology and Logistics and the relevant US embassy determine an appropriate plan of action to mitigate the flow of funds to designated persons or entities When that plan of action includes contract actions the head of the contracting activity may terminate or void the grant contract or cooperative agreement and restrict future awards to such persons or entity The Senate Committee also recommends providing for post deprivation due process for the listed group within 30 days of the receipt of notification of the entities failure to satisfy Section 841 requirements 21 V WHAT IS AT STAKE The current use of Section 841 by DOD and potential expansion of this authority to State and USAID raises serious concerns both for NGOs and potential Section 841 designees The lack of clearly defined guidelines to determine when a person or entity is actively supporting an insurgency or otherwise opposing United States or coalition forces and the failure of the DOD to provide information to parties regarding the reasons for their Section 841 designation raise serious due process concerns for those whose grants are voided A negative Section 841 determination could also appear on a grantee s Past Performance Evaluation which would make it nearly impossible for the grantee or contractor to receive any government contracts for a period of three years or longer Likewise the lack of a clear definition and guidelines as to when a person will qualify for a Section 841 designation could create a culture of fear amongst potential grantees and cause a chilling effect in the awardees protected right to freedom of association and freedom of expression Additionally requiring NGOs USAID and State to provide personal information and potentially actionable intelligence regarding their key personnel and sub grantees to the DOD may risk the neutrality of the NGOs putting their immunity under International Humanitarian Law at risk and risking the safety of its members on the ground A DUE PROCESS CONCERNS While it appears that the designation undergoes many levels of internal informational and legal review the reasons for the designation and information upon which the designation is based are not available to the designees Although Section 841 designation itself is unclassified the information CENTCOM uses to make a determination may be classified and is not automatically shared with contractors As a result the prime grantees cannot share with subcontractors the reasons for the termination of the contract and prime awardees may not know themselves the reasons for their Section 841 designation Such information according to Section 841 may only be shared pursuant to a protective order issued by a court of law 22 Not only do these situations constitute a potential violation of due process for the designees but they may expose prime awardees to litigation for breach of contract under the domestic law of the host country Similarly prime grantees may be forced to absorb the cost of finding new subcontractors to complete the desired work under the terminated contract DOD implemented a two phase procedure in order to exercise the authority granted under Section 841 In phase one DOD s Task Force 2010 TF2010 compiles a package of information on potential designees to determine whether a person is actively supporting an insurgency or otherwise opposing the U S or coalition forces This information package includes known civil and criminal activity affiliations and associations with malign actors and known terrorism and insurgent ties and may include classified and unclassified date TF2010 uses this information to ultimately determine whether the potential awardee is actively supporting an insurgency or otherwise opposing U S or coalition forces based on the quality quantity timeliness and level of corroboration of the evidence Once a person or group is designated by TF2010 the information package undergoes an external legal review TF2010 also conducts a contract impact analysis to identify any potential second tier or third order effects to determine the consequences in the area of operations if the designated person or group could not perform under the contract based on a Section 841 designation The information package if approved is routed through a series of coordinating agencies within the International Security Assistance Force ISAF Joint Command for review and agreement before it reaches CENTCOM for a final decision The Section 841 designation package receives a number of senior level approvals including approvals by the Deputy Chief of Staff of ISAF Joint Command the Commander of the ISAF Joint Command and the Commander of the ISAF U S Forces Afghanistan before finally reaching CENTCOM Once at CENTCOM the package is subject to another intelligence review and legal evaluation from the CENTCOM Judge Advocate The CENTCOM Commander then reviews the package and all of the information compiled up to this point and makes the final determination as to whether to designate the person or entity as a prohibited party If the CENTCOM Commander approves the package the Commander creates an unclassified Section 841 notification letter listing the person or groups identified along with a request that the head of agencies or heads of contracting activities exercise the authority granted by Section 841 to restrict terminate or void contracts with those designated as prohibited parties under Section 841 CENTCOM will then distribute the notification letter to the key heads of agency and select heads of contracting authorities In phase two the key heads of impacted agencies and select heads of the contracting authorities determine if they have any contracts with the person or group designated in the CENTCOM notification letter There is no formal procedure to determine whether the contracting authorities are engaged with prohibited parties The policies used by these entities to determine whether they are engaged in contracts with designated parties ranges from formal to ad hoc according to a survey conducted by SIGAR The process concludes when the head of the contracting authority responds to CENTCOM with information on the number and value of any contracts with the prohibited person or entity and the actions taken on the contracts 23 B NEUTRALITY OF INTERNATIONAL NGOS According to the International Committee of the Red Cross ICRC under customary International Humanitarian Law IHL civilian humanitarian relief personnel are protected against attack according to the principle of distinction This requires the parties to any conflict to distinguish between civilians and combatants at all times Attacks may only be directed against combatants and must not be directed against civilians unless and for such a time as the civilians take a direct part in the hostilities 24 Likewise under the Statute of the International Criminal Court intentionally directing attacks against personnel involved in a humanitarian assistance mission during an international armed conflict is a war crime as long as the humanitarian organizations are operating in accordance with the Charter of the United Nations and such personnel are entitled to the protection given to civilians under IHL 25 These humanitarian organization rely on their neutrality and separation from participation in the hostilities in order to claim protection as civilians under International Humanitarian Law The provision of actionable intelligence to a party to the conflict may threaten the organization s neutrality classification as civilian and therefore protection under IHL The collection of actionable intelligence by U S funded humanitarian organizations also places these organizations at serious risk of retaliatory attacks from the members of the communities they are trying to serve These humanitarian organizations rely largely on community acceptance and the perception of independence and neutrality in order to function safely in their respective communities Should these communities believe that the organizations are providing intelligence to the U S or any party to an armed conflict the ability of that organization to function in a principled and safe manner may be gravely threatened not only by the loss of protection under IHL but also by retaliatory action by those who perceive the organization as an agent of the United States government Therefore Congress should exercise caution in expanding this program to State and AID and should consider carefully the impact that the expansion of this program will have on the safety of the humanitarian organization and their employees serving the communities on the ground C RESTRICTION OF FREEDOM OF ASSOCIATION AND EXPRESSION The lack of clarity and transparency in determining which individuals and entities are designated under Section 841 as actively supporting an insurgency or otherwise opposing U S and coalition forces may have a chilling effect on the rights to free expression and association of potential DOD grantees According to the Universal Declaration of Human Rights and International Covenant on Civil and Political Rights every person has the right to freedom of opinion and expression 26 and the right to freedom of peaceful assembly and association 27 These rights may only be subject to restrictions which are prescribed by law and necessary in a democratic society in the interests of national security or public safety public order the protection of public health or morals or the protection of the rights and freedoms of others According to the United Nations Office of the High Commissioner for Human Rights OHCHR clear safeguards must exist to ensure that the right to association is not curtailed unnecessarily The principles of necessity and proportionality must be respected in all cases and the principle of legality must be respected in properly defining terrorism The OHCHR specifically emphasizes the need to specifically define terrorism terrorist acts and terrorist groups in order to ensure that groups are not criminalized without warrant Accordingly any decision to proscribe a group or association as terrorist needs to be taken on a case by case basis and must be assessed by an independent judicial body with full notice to the affected group This process must present the possibility of appeal 28 The Special Rapporteur on Human Rights and Counter Terrorism has likewise stressed the importance of ensuring that all decisions which limit human rights are overseen by the judiciary so that they remain appropriate proportionate and effective and so that the government may ultimately be held accountable for limiting the human rights of individuals The DOD process lacks such oversight by an independent judicial body fails to provide full notice to the affected individuals and lacks any review procedure presenting a serious threat to the enjoyment of the freedom of assembly and expression of the potential DOD grantees Without clarity to determine which actions and contacts will render an individual ineligible to receive a DOD grant many individuals may cease their association with even legitimate organizations and individuals out of fear that these contacts may result in a Section 841 designation and the loss of potential grants or contracts VI CONCLUSION The expansion of the DOD Section 841 procedures and authority to State and USAID while recommended by SIGAR has so far not been adopted by either the House or the Senate The threat of expansion has in any event prompted a pre emptive response from USAID which expanded the scope of its own vetting procedures Congress should continue to exercise caution when considering expanding the DOD program to these agencies due to the differences in the mission and purpose of DOD State and USAID In expanding the DOD program Congress could risk interrupting the currently functioning systems at State and

CSN Files Comments on Proposed USAID Rule that Gathers Data on Charity Partners | Charity & Security Network be checked or can the applicant fail vetting based on a potential false positive What happens to the information if the hit turns out to be a false positive Does the applicant get an opportunity to cure or challenge a match prior to a decision on vetting Are any distinctions made on these different levels of potential ties to terrorism published terrorist list unpublished terrorist list affiliated with or linked to Foreign laws How will USAID handle situations where law in country where program being carried out prohibits collections of such information by a foreign government or others Are foreign NGOs that apply to be prime awardees covered by the proposed rule The Risk Based Analysis lacks adequate structure and definitions The Risk Based Analysis RBA concept is not adequately defined and developed While it provides some general key factors to be considered there are no standards Instead it says the details will be dictated by specific circumstances This is an excessive delegation of authority to individual USAID staff and can result in inconsistent application and potentially discriminatory or other inappropriate criteria For example the announcement says the RBA review will consider the likelihood that individuals linked to terrorists may benefit from the program Under these criteria a baby could be denied medical or food assistance because s he is linked to someone affiliated with terrorism This would violate the fundamental humanitarian principle that assistance be based on need alone The heavy emphasis of the RBA requires that there be a consistent policy and procedure for how it will be implemented Logistical issues It is not realistic to require vetting of sub awardees at the application stage since NGOs often are not yet able to identify them prior to a decision on the grant application In addition it is not clear what happens when a new key individual comes on board such as with staff turnover whether or not the NGO has to wait for vetting results or can move forward Waiting could cause program delay and implementation problems 6 Fundamental Due Process is Lacking The process for challenging an adverse finding from vetting is insufficient as the applicant will not necessarily be given reasons or enough information to make a meaningful response Adequate notice of reasons and meaningful opportunity to respond are at the core of due process protections and are lacking here There is too much discretion left open USAID employees to determine how much information an applicant may get about an adverse finding This can prevent an applicant from making an adequate response and lead to inconsistent implementation uneven results and over caution by USAID employees Definitions and clear guidance are needed There is no process of a key individual to challenge an adverse finding These individuals can lose their livelihood and have other problems as a result of an adverse finding and should have some method of redress Cost Benefit Analysis 1 Counterproductive Policy Impacts PVS is contrary to the U S goal of making allies For example U S policy as articulated in USAID s Country Development Cooperation Strategy 5 seeks to cultivate positive relationships with local communities it serves PVS will undercut this goal by creating the perception of using USAID programs for intelligence gathering undermining the political neutrality of its partners PVS will have unintended consequences on program effectiveness For example in programs that address underlying grievances that cause instability and conflict or that promote peaceful political transitions facilitate reconciliation and similar goals people that are necessary participants may be excluded by PVS if deemed to have linkage to terrorism or meet one of the other undefined criteria Groups engaged in research and conflict management programs on the ground need the very people that vetting may prohibit from participation to be successful 2 PVS will Deter Applications from Qualified NGOs The notice states that PVS will deter terrorists and their affiliates from applying for USAID funds Unfortunately systems such as PVS tend to create barriers to effective delivery of aid programs and will discourage NGOs from applying for grants and alienate international partners without effectively addressing national security concerns The pool of effective partner organizations is likely to shrink due to their objections to turning over detailed personal information to be shared with law enforcement and intelligence agencies In the case of local staff the request amounts to a collection of their identifying information by a foreign government an intrusion into privacy that many are likely to object to Many highly qualified internationally respected NGOs have legal and or principled objections to turning over detailed personal identifying information on their staff and board members to a governmental entity For example the former head of the United Nations Office for the Coordination of Humanitarian Affairs 2003 to 2006 and current Secretary General of the Norwegian Refugee Council Jan Egeland said the following in a September 2013 interview with the Global Observatory My own organization is today having to turn away money we really need for water and sanitation projects in the biggest refugee camp on earth which is the Dadaab camp for Somali refugees in Kenya because we ve been asked by a donor which is a very good donor in general to do something bad which is to hand over bio data on all of the staff involved in this project and all of our partners and contacts in this project so that they this western donor can vet these people That is prohibited by our board we cannot do that We have to avoid being seen as an instrument for any political or other actor in this world and especially in a sensitive place like the Somali refugee programs 6 3 PVS Undermines the Independence and Neutrality of NGOs Creating Threats to Safety Independence and political neutrality are central principles that humanitarian organizations adhere too These principles have both a moral and practical basis They ensure that aid is used solely to relieve human suffering and not to further political or military

A License to Aid? How Politics Delays Aid to Civilians in Conflict Zones | Charity & Security Network 2013 Charity X received a decision on its 2010 request It read No further information was presented with the denial OFAC considered the case closed and welcomed the charity to reapply According to the Executive Director of the charity during those two years without word from OFAC we had to revamp our processes to ensure compliance with U S laws all while ensuring our work for the well being of humanity and those we serve prevails Without the license the charity was forced to change its plans and was limited in the scope of the work it could conduct The fact that approval was required from the State Department appears to show that political considerations are weighted more than humanitarian ones when it comes to licensing decisions The State Department has no authority for approving or denying licenses under the law that governs the U S economic sanction regime It is solely the responsibility of the Treasury Department The lack of foreign policy guidance from the State Department should not be the operative consideration in a licensing request Rather as the Executive Director of the charity stated humanity not politics should be the chief concern for supplying aid to needy individuals in Gaza or elsewhere Without the license Charity X was unable to extend the reach of its aid programs to students in non UN chartered schools It faced greater difficulty moving in and out of Gaza and ran into additional barriers when transferring money into the territory An All to Common Problem As an isolated incident the inability of this charity to get a license to provide aid to children is troubling enough However in other sanctions regimes similar cases abound In Somalia a large scale drought was exacerbated by the terrorist group al Shabaab which controlled swaths of territory in Southern Somalia Al Shabaab much like Hamas acted as a de facto thought far less organized government in some of the areas hardest hit by drought and food shortages iv Aid groups were concerned that providing food and shelter in al Shabaab controlled areas could expose them to legal liability because of the sanctions against the terrorist group According to a May 2013 report Commissioned by the UN and USAID legal restrictions on aid contributions in addition to other factors contributed to the nearly 260 000 deaths during the famine v Interaction an association of over 200 aid and development organizations requested that OFAC issue a General License for Somalia to allow unimpeded access to starving civilians by aid groups The General License unlike the specific license requested by Charity X in Gaza would have applied to all aid groups and would have bypassed the lengthy and inefficient process of each individual group s obtaining its own individual license OFAC denied this request stating only that the situation in Somalia does not lend itself to a broad general license vi If the government s strict enforcement of sanctions against terrorist groups in Gaza and Somalia rested solely on